Topic 7 Global Management Key Terms

Context

The circumstances or setting surrounding an event or idea.

Countertrading

Barter-like trade where goods/services are exchanged instead of money.

Cross-cultural awareness

Understanding and respecting cultural differences in interactions.

Culture

Shared beliefs, values, customs, and behaviors of a group.

Dumping

Selling products abroad below cost to gain market share.

E-commerce

Buying and selling goods/services online.

Embargo

Official ban on trade with a particular country.

Ethnocentric managers

Managers who believe their home culture is superior.

European Union (EU)

Political and economic union of European countries with common policies.

Exchange rate

The value of one currency in terms of another.

Expatriates

Employees working outside their native country.

Exporting

Selling goods/services to foreign markets.

Expropriation

Government seizure of private assets, often without fair compensation.

Foreign Corrupt Practices Act

U.S. law prohibiting bribery of foreign officials.

Franchising

Licensing a business model and brand to local operators.

Free trade

Unrestricted international exchange of goods/services.

Geocentric managers

Managers who adopt a global perspective, valuing all cultures equally.

Global economy

Worldwide economic system interconnected by trade and investment.

Globalization

Increasing integration of economies, cultures, and societies worldwide.

Global outsourcing

Contracting business functions to external providers abroad.

Global village

The world considered as a closely connected community.

GLOBE project

Research studying cultural differences and leadership worldwide.

Greenfield venture

Starting a new business operation from scratch in a foreign country.

High-context culture

Communication relies heavily on implicit messages and context.

Import quota

Limit on the quantity of goods imported.

Importing

Buying goods/services from foreign producers.

Joint venture

Business partnership between two or more firms sharing ownership.

Licensing

Permission to use intellectual property or brand for a fee.

Low-context culture

Communication is explicit, direct, and clear.

Maquiladoras

Factories in Mexico run by foreign companies for export.

Monochromatic time

Viewing time linearly, focusing on one task at a time.

Most favored nation

Trade status granting equal tariff treatment to all partners.

Multinational corporation

Company operating in multiple countries.

Multinational organization

Entity with operations and influence across nations.

Offshoring

Moving business processes to another country.

Outsourcing

Hiring external firms to perform business activities.

Parochialism

Narrow focus limited to one’s own culture or perspective.

Polycentric managers

Managers who adapt to the host country’s culture.

Polychromatic time

Viewing time as flexible, multitasking common.

Sanction

Penalty imposed to enforce international laws or policies.

Tariff

Tax on imported goods.

Trade protectionism

Policies restricting imports to protect domestic industries.

Trading bloc

Group of countries with agreed trade rules to reduce barriers.

Trans-Pacific Partnership (TPP)

Trade agreement among Pacific Rim countries.

U.S.–Mexico–Canada Agreement (USMCA)

Trade pact replacing NAFTA among the three countries.

Wholly owned subsidiary

Company fully owned and controlled by a foreign parent firm.